February 06, 2012

Medical Device Maker Agrees To $16.8M Penalty In Bribery Case

The global medical device manufacturer Smith & Nephew Inc. has agreed to pay $16.8 million to resolve claims that company officials made illegal payments to public health officials in Greece, the U.S. Justice Department said today.

Prosecutors brought Foreign Corrupt Practices Act charges against the company, represented by the law firms Sidley Austin and Davis Polk & Wardwell, in U.S. District Court for the District of Columbia.

Prosecutors announced the settlement with Tennessee-based Smith & Nephew simultaneous with the filing of charging documents. The company is a subsidiary of Smith & Nephew, plc, in the United Kingdom.

Smith & Nephew investigated and disclosed company misconduct—which included the payment of cash incentives to Greek health care workers—to DOJ and to the U.S. Securities and Exchange Commission, according to the deferred prosecution agreement (PDF) the company entered into with the government.

DOJ lawyers, including Kathleen Hamann, a DOJ Criminal Division trial attorney, said the company cooperated with the department and with the SEC. The company agreed to pay $5.4 million in disgorgement of profit in a deal reached with the SEC.

Hamann said in charging documents the purpose of the bribery conspiracy was “to secure lucrative business with hospitals in the Greek public health care system by making and promising corrupt payments of money and things of value” to public employees.

The Smith & Nephew chief executive officer, Olivier Bohuon, said in a prepared statement the charges “underscore that we must remain vigilant every place we do business and let nothing compromise our commitment to integrity.”